Antofagasta Gold Inc.
TSX VENTURE : AN

May 30, 2013 11:17 ET

Antofagasta Gold Signs MOU to Acquire 3,150 Square Kilometre (320,000 Hectares) Atacama Copper Property, Antofagasta Copper District - Northern Chile

TORONTO, ONTARIO--(Marketwired - May 30, 2013) - Antofagasta Gold Inc. ("Antofagasta" or the "Company") (TSX VENTURE:AN) has entered into an exclusive Memorandum of Understanding (the "MOU") for a four year option agreement (the "Option Agreement") to earn an 80% interest in the Atacama Copper Property ("Property"). The Property consists of approximately 3,200 contiguous square kilometres (320,000 hectares) in Chile's Antofagasta Region II, home to some of the world's largest mining operations, and covering a large undrilled portion of the highly prospective Jurassic and Paleocene-Early Miocene copper porphyry belt.

The Property commences approximately 40 km NE from the city of Antofagasta, and is traversed by major highways, railways, and high-tension power lines, most of which service existing operating copper mines in the region. The claim block, roughly 120 km by 40 km running almost north south, covers most of the land between several major producing mines in the area. A map showing the outline of the claim blocks and the location of the larger mines in the immediate area can be found here.

William Randall (M.Sc., P.Geo), President & CEO of Antofagasta Gold, commented: "signing this landmark MOU marks the beginning of an exciting new era for Anofagasta Gold. The opportunity to be the first to prospect within the heart of Chile's world class copper district is extraordinary, given the dominant control over mineral title by the country's largest mining companies. This ground, underexplored and covering large tracts of two productive copper porphyry belts, provides our shareholders with unparalleled exposure to potential world class discoveries."

Most of the copper porphyry deposits of the region belong to the Paleocene-Early Eocene world class Copper - Molybdenum porphyry belt which extends from southern Peru to northern Chile for a distance of over 1300 km. One of the more recent major discoveries in the immediate region is the Spence enriched Cu-Mo deposit. Spence, located 4 kilometres west of the Atacama Copper property boundary was discovered under 60 metres of gravel cover by Rio Algom in 1996 and is related to three Paleocene dacite porphyry intrusive and tourmaline breccias aligned NE-SW. The deposit has a 20m thick oxide zone followed by a well developed enrichment blanket averaging approximately 60m in thickness. The deposit lies on the intersection of prominent NE and NW trending structural lineaments.

Vernon Arseneau (P.Geo), VP Exploration of Antofagasta Gold, commented: "the area negotiated covers a variety of ground that has had little to no exploration to date, despite being centrally located in one of the world's largest copper mining districts. The Spence discovery serves as a good reminder that there is great potential under the gravel cover. Antofagasta's exploration program will take advantage of the tremendous advances in mineral exploration techniques since 1996 to locate deposits under variable cover. In addition, having this land package contiguous to the Company's Capricornio project, allows for us to start work without significantly changing the team or construction of additional camps. We can start work immediately after signing the definitive agreement."

Terms of the Deal

Antofagasta has signed a binding MOU with an arm's length public mining company to enter into a four year option agreement to earn an 80% interest in the Atacama Copper project. Under the Option Agreement, Antofagasta Gold will be required to pay the Vendor option fees, and commit to a work program, over the four year period which will be based on the size of all land held under the Option Agreement at the time of each relevant payment milestone.

Antofagasta Gold will have to reduce the total area and will be able to exercise the option on a maximum of 50,000 ha. The terms of the deal consist of total obligations that are approximately US$10 million over 48 months. Antofagasta Gold is not restricted in the selection of the area that it chooses to retain allowing the Company to retain only the high priority targets identified in the early stage exploration program. Antofagasta Gold will have, at all times during the Option Agreement, the right to relinquish any parts of the Atacama Copper Property back to the Vendor with no further liability. The Vendor will retain a Net Smelter Royalty on all metallic minerals. Further details of the terms will be disclosed upon signing the definitive agreements.

About Antofagasta Gold

Upon entering into a definitive option agreement regarding the Atacama Copper Property, Antofagasta Gold will have three properties under option covering approximately 346,000 hectares. All the properties are within the Antofagasta region of Chile, at low altitudes and within producing mining camps. Approximately 6350 metres of diamond drilling have been completed on the Capricornio Property. The first set of drill results were released on February 14th, 2013 (refer to news release for details) and the Company anticipates releasing the remaining holes in June, 2013.

The Company currently has approximately $4,700,000 cash (as of March 31st, 2013). The remaining property payments for all properties held by Antofagasta Gold total $550,000 for the remainder of 2013. Total payments currently committed to for 2014 are expected to be $1,330,000 and remaining work commitments for 2013 & 2014 combined are expected to be approximately $1,545,000. The Pampas El Peñon and Atacama Copper option agreements allow for further reduction in land size, therefore reducing property payments and exploration commitments further.

The technical and scientific aspects of this news release have been reviewed and approved by Mr. Vernon Arseneau, P.Geo, who has been designated as a qualified person pursuant to under NI 43-101. As the Vice President of Exploration of the Company, Mr. Arseneau is not considered independent.

On behalf of the Board of Directors of

Antofagasta Gold Inc

William Randall, President, and CEO

Cautionary Note Regarding Forward-Looking Information and Mineral Resources:

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements (express or implied) relating to production results and/or the impact of such production results with respect to the timing, cost and/or amount of future exploration and development of any property, the timing, cost and/or amount of future production, the future price of gold or other minerals, the successful implementation of development plans at any of the Company's properties and/or the future financial or operating performance of Antofagasta, its properties and/or its projects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, its properties and/or its projects to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of the Company, which is available under the profile of the Company on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. It should also be noted that mineral resources that are not mineral reserves do not have demonstrated economic viability.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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